Airbus and the A220 suffer from supply difficulties

Deliveries of the A220 have stagnated as supply problems torpedo Airbus’ efforts to ramp up production – a key condition for the still-loss-making program to take off. If the European aircraft manufacturer stays the course on its profitability target, some believe that it will have to wait.

“We are below our delivery targets, acknowledged Airbus CEO Guillaume Faury on Tuesday in a conference call, without specifying the initial target. [L’A220] is a program on which we have been affected by supply chain and engine side issues. We therefore delivered fewer devices than planned. »

With the commercial director of Airbus, Christian Scherer, the big boss of the European multinational took stock of orders and deliveries for the past year. No program has been spared the difficulties of obtaining certain parts, underlined the two managers.

Fifty-three examples of the former Bombardier C Series were handed over to customers last year. This is three aircraft more than in 2021. Deliveries accelerated in the last three months of the year, which allowed the A220 to show slight year-on-year growth.

Signals sent last fall suggested that the situation was becoming more complex. In presenting its second-quarter results last October, JetBlue, the A220’s second-largest customer, said it expected to receive fewer planes than expected in 2023. The US carrier blamed the situation on turbulence at Airbus on the production side.

Less money ?

25% owned by the Quebec state, the A220 was reinvested by 1.5 billion in 2022 – including 380 million from Quebec. We hope to produce 14 planes monthly in Mirabel, in the Laurentians, as well as in Mobile, in Alabama, by 2025 – the year when the A220 should in principle come out of the red. Even if everything does not go as planned, for the moment, Mr. Faury observes “no impact” on the schedule for achieving profitability. Managing director of the firm AeroDynamics Advisory, Richard Aboulafia sees things differently.

” I believe that [l’échéancier] will be pushed back, the analyst said in a telephone interview. Profitability depends on volume [de production] and if it is not there, it must be revised. In the long term, this does not affect the program, but in the short term, it is something else. »

This could have consequences for taxpayers. By agreeing to put money back into the program, Quebec was able to push back to 2030 the time when Airbus would buy back its stake in the A220. The value of the investment is always “zero” in the government’s financial statements. The longer the profits are delayed, the more the sum obtained by the State risks being amputated.

More headaches

Airbus and other aircraft manufacturers are not at the end of their troubles. The next year “will remain difficult” in terms of supply, predicts Mr. Faury.

“Even if some problems are resolved, others emerge,” he said. We could take the hit from the energy crisis in Europe and the difficult situation in China, where we are moving away from the zero COVID policy. »

It will take time for things to get back to normal, also believes Mr. Aboulafia, who nevertheless expects to see deliveries of the A220 increase. A target of 65 devices is “reasonable”, in his view. Airbus did not want to advance a target. The aircraft manufacturer delivered just over four A220s per month. Airbus Canada communications chief Annabelle Duchesne says the multinational is “working hard” to maintain a monthly production rate of six aircraft.

“The cadence remains at six, but there are temporary changes to the assembly sequence,” she says. There’s more planning going on. »

For example, the exterior of an aircraft fuselage can sometimes be painted in customer colors even if its interior layout is not 100% complete because some parts are missing. M^me Duchesne would not say if the current situation could force Airbus Canada to review its production strategy.